JIM GUY: CBRM's stormy budget a sign "dire financial circumstances"

Running on empty and workin' overtime

Cape Breton Regional Municipality (CBRM) council just painfully balanced another budget last week.

But this one was divisive and polarizing. A razor-thin 7-6 approval on the capital budget is a predictor of more tough debates and tougher times going forward. None of the council members thought the agonizing exercise was rewarding. It remains to be seen what residents think when the rubber hits the road.

days this council confronts the never-ending challenge of less municipal revenues, a diminishing tax base, stalled and unfair provincial transfers, and an angry and aging electorate.

The trick will be to maintain public confidence in a municipal system seemingly in decline. That may be very difficult for those living under it, facing the highest residential and commercial taxes, high unemployment, child poverty and population decline.

It no longer matters whether CBRM employees increase their productivity, or whether new efficiencies are superimposed on municipal departments, the result is the same: less revenue, fewer services that are degraded and ultimately less sustainability.

The new normal is that tax revenues are no longer held constant with the equalization transfer manipulated annually by Halifax bureaucrats requiring the CBRM to give it all back and then some. Yet more costs are downloaded on this government and residents seeking assistance scramble over the dregs.

Numerous community groups and organizations have had their "asks" declined in spite of the economic and cultural contributions they make to the welfare of the community. Declining tax capacity affects all services provided.

Unless business start-ups magically multiply, a resurrected rail system gets on track and port development flourishes, the pattern trend for the survival of this municipality is discouraging. The province has already shown its cards on its willingness to support rural municipalities. Municipal dominos are falling and predictably insolvent: Canso, Mulgrave, Springhill, Hantsport, Bridgetown.

Are we on the endangered community list? CBRM's slide back is reflected in this budget. The mayor and some members of council are warning of "dire financial circumstances" in the coming years. We are cash-strapped and running on empty.

The province received $1.838 billion in equalization transferred in part to address the weak tax capacity of over 40 municipalities in Nova Scotia. We are one of those municipalities with declining tax capacity.

Yet CBRM's portion of the equalization transfer is a mere one per cent of the total and has remained the same for the past four years. This is a misappropriation of the equalization transfer and a failure to meet the expectations of this money as stated in our constitution and in the original public policy framework dating back to the 1950s.

Some 98 per cent of the equalization transfer is driven back into the general revenues of the province, with a great proportion of it flowing into the development and prosperity of Halifax as the provincial capital at the expense of all other municipalities.

What we have is a violation of national law and a violation of constitutional law. The federal government should audit the pathway of its own transfer to the province. The provincial auditor should audit the pathway of the transfer once it hits Nova Scotia accounts. And, the CBRM has rightfully demanded an audit of its own operations. Pointed questions need to be answered about the calculation metrics of equalization.

If our questions fall on deaf ears as we slide further down the road to insolvency we should think about another march of concern similar to the protest we staged in 1967. It drew national attention as the use of federal transfer money should also draw national attention. After all, it is our money and it should be used as intended to equalize economic development.

Professor Jim Guy, PH.D, author and professor emeritus of political science at Cape Breton University, can be reached for comment at
jim_guy@cbu.ca.